Buying SPOT put contracts.
Spotify Technology (SPOT) is a leading music streaming platform with some other ancillary business ideas.The company continues to lose money and is up against significant competitors including Apple Music.
Spotify has fallen dramatically from it’s 2021 peak. But the current stock price still values Spotify with a 15 billion market cap — despite ongoing losses (which are expected to continue for years to come).
This week’s bear market rally helped to drive shares of SPOT higher. But the overall bear trend is still intact.
The rebound gives us a good opportunity to buy put contracts, betting on a decline into year end.
For what it’s worth, SPOT could be a tax-loss-selling candidate, trading lower as investors sell shares to lock in losses (for tax purposes) at the end of the year.
Our put contracts should profit quickly if SPOT breaks down again. And if the bear market rally continues, these put contracts should still keep some residual value helping to protect our capital. (Plus, we have plenty of bullish exposure in play right now.)